Tribune shareholder urges asset sale, share buyback

(Reuters) - A minority shareholder in Tribune Publishing Co urged the company to sell non-core assets and buy back shares, saying the publisher of the Los Angeles Times and Chicago Tribune was undervalued. Engine Capital LP, a hedge fund which has a stake of "more than 1.5 percent" in Tribune, said most of the value of the company's non-core assets were through its ownership of ForSaleByOwner.com and its 33 percent stake in HomeFinder.com. "...Given the "winner-take-all" nature of these online properties, we are concerned that over time, Tribune's properties may lose value if they become less relevant," the hedge fund said in a letter the company. The company's shares were up 2.2 percent at $17.30 in morning trading on Wednesday. Tribune was not immediately available for comment. Engine Capital said Tribune could sell all its non-core assets for at least $150 million. That is roughly 35 percent of the company's market value as of Tuesday's close. The hedge fund also said the company could use the proceeds from assets sales to buy more publishing assets or buy back shares, which, according to the hedge fund, Tribune's management also believes is undervalued. Engine Capital estimated that Tribune trades for less than 3 times earnings before income, tax, depreciation and amortization, lower than Time Inc's valuation of more than 6 times. The hedge fund said the difference was due to Time's "willingness to explore opportunities to monetize non-core assets" and protect margins through cost-cutting. Tribune's Chief Executive Jack Griffin said in a statement released last week that the company was "actively engaged in right-sizing the cost structure of the organization". (Reporting By Sudarshan Varadhan in Bangalore; Editing by Savio D'Souza)